Amdocs Ltd. recently reported fiscal second-quarter results in line with analysts' expectations, but warned it will not meet projections for the year due to the weak telecom marketplace.
The quarter ended March 31 marks the first full quarter of operation after completing the acquisition of Clarify from Nortel Networks for $200 million in cash in November 2001.
The company, which develops billing and CRM applications to the telecommunications industry, said second quarter revenue reached $455.3 million, an increase of 22.3 percent over last year's second quarter. The company's profit, which includes acquisition-related charges for amortization of goodwill and purchased intangible assets and related tax effects, was $26.4 million, or 12 cents per share, compared with a year-earlier profit of $15.4 million, or 7 cents per share.
Excluding acquisition-related costs, net income increased 22.5 percent to $82.9 million, while earnings per share increased 23.3 percent to 37 cents per share, compared to net income of $67.6 million, or 30 cents per share, in the second quarter of fiscal 2001. This is in line with the average estimate of brokers surveyed by Thomson Financial/First Call, which called for a pro-forma profit of 37 cents per share.
"This quarter, we continued to meet revenue and profitability targets and our ability to generate cash remains very high. In light of the current economy, I am very satisfied with the results.... We saw particular momentum in the CRM area with several new customer wins reflecting our unique ability to offer both full integration with our customer care and billing product and standalone offerings," said Avi Naor, chief executive officer of Amdocs.
Despite a year-over-year quarterly improvement, Amdocs warned that revenue for the fiscal year ending Sept. 30 will be about $1.73 billion, with earnings of $1.40 share as a result of weak customer additions. The First Call estimate for the year had been for revenue of $1.85 billion, with earnings of $1.50 per share.
Analysts at CIBC downgraded the company from a "strong buy" to a "buy" rating after Amdocs guided down its fiscal year forecast.